What to do When Financial Aid Isn't Enough

Financial aid award letters can bring happiness or they can bring misery.  If you are fortunate, your college has offered you a sweet financial aid package that covers all of your financial need without too much loan burden.

If you are less fortunate, your college has offered you a financial aid package that leaves you facing a future of mounting financial debt.  Don't give up yet!  There are a few steps you can take to try to get a better deal.

1.  Contact the financial aid office at the college.  Explain why you believe you need more grant (gift) money to make it possible for you to attend that college.  You've been admitted and it is the financial aid office's job to help you find a way to afford the cost.  Colleges sometimes end up with a little more available money as students begin informing them that they will not be attending after all- make sure you get in line for any new money that become available.

2.  Request work study from the financial aid office if they haven't already offered it.  With work study you can get a job, earn money, and use that money to help you pay for your college expenses.

3.  Keep applying for scholarships.  There are still many opportunities.

4.  Compare the financial aid letters from all of the colleges that have admitted you.  They will be very different and you can select the college that offers you the best financial aid.

Undocumented Students and Financial Aid

I had a difficult conversation with one of my students today.  She is bright, articulate, mature, and eager to pursue a college education but is undocumented. Unfortunately, undocumented students can not receive government financial aid.

The good news is that undocumented students can receive scholarships as long as being a US citizen is not a specific criteria for the scholarship.  Check this link http://www.e4fc.org/studentresources/scholarshiplists.html for an excellent source of scholarships that all high school students can apply for regardless of immigration status.  Don't forget that colleges are also a good source of financial aid and undocumented students should make sure to discuss their financial need with the financial aid office at the college they would like to attend.  Many colleges can provide collegiate grants and scholarships for undocumented students.

FAFSA Submission - Next Steps

Parents of seniors should be submitting their on-line financial aid applications (FAFSA) during this month.  Remember: don't wait until you have completed your 2010 tax return, just use your 2009 tax return to estimate your FAFSA answers.  After you have submitted your application there are a few other steps to take.

Next steps:
1.  For California colleges you must submit an official Cal Grant GPA verification form.  The form can be downloaded from the FAFSA website (www.fafsa.ed.gov) and completed and mailed by snail mail.
2.  Check your email for a FAFSA confirmation.  The confirmation has the directions for making any changes to the information you submitted.
3.  Begin contacting the financial aid offices at the colleges to which you applied to determine the financial aid package each college can provide.
4.  Compare the financial aid packages offered by each college to determine the best offer.  Don't forget that you can negotiate for a better financial aid package by talking to the financial aid officer at the college.

What the Heck is EFC?

Now that you have submitted the on-line financial aid application (FAFSA), the US Department of Education has told you what your EFC is.  EFC stands for Expected Family Contribution and it is a very, very important figure for understanding the whole financial aid process.

Based on your FAFSA submitted data, the government has determined that your family can afford the EFC amount each year for college expenses.  In other words, the EFC is the amount that you will be expected to pay each year.   It is important to understand that this is the amount you will be expected to pay regardless of how much the college costs.  No matter which college your son/daughter attends, very expensive or inexpensive, you will have to pay the same amount: your EFC.  The difference between how much the college costs and how much you have to pay is the amount of financial aid you are eligible to receive at each college.

Another important angle to understand is that you will not have to write a check to the college in the amount of your EFC.  You can use your financial aid to pay the tuition and housing expenses.  Your EFC amount can be used to cover the on-going costs such as books, clothes, personal supplies, and transportation that can be paid throughout the year as needed rather than in one lump sum.  You will not feel the pinch as much since you will spread out the cost over the year.

I know this is a complex subject and  I would love to hear your comments and questions.

The Most Common Mistake Made When Applying for Financial Aid

Now that we have entered the filing period for Financial Aid, many of my students have been asking me nuts and bolts questions about the actual FAFSA application.  I am finding that way too many of my students are accidentally selecting the wrong year for their aid applications.  Completing the entire application for the wrong school year is quite disheartening to a 17 year old, even though I myself can't help laughing about it.

Teens:  make sure you select the option to apply for aid for the next school year, not this school year!  The FAFSA on-line application is very well designed and easy to complete but I recommend that the US Department of Education consider fixing the prompt for selecting the year. :)

The Secret to Getting the Best Financial Aid Package

All financial aid packages are not equal.  By following three important tips you can make sure you get the most financial aid possible. 

1. Apply early.  Financial aid is handed out on a first come basis.  Make sure you submit a carefully completed on-line FAFSA as soon after January 1st as possible.  Do not wait until February.
2. Apply to colleges where you will be in the top of the applicant pool.  In other words, if the college feels you are a highly desirable applicant, the college will entice you to attend by offering you additional scholarship money.  Remember, colleges want to recruit top students and will make it affordable if they want you.
3. Contact the financial aid officer at the college if you need more financial assistance.  Explain your concerns and negotiate a better offer.  College financial aid officers have leeway to increase your aid.

Is there really free money for college?

It's financial aid season so it is important to understand some basics about paying for college.  Financial aid is money from the government (Federal and State) to help you pay for college.  The good news is that it is quite simple to apply for financial aid.  You complete one on-line application http://www.fafsa.ed.gov/ and you are applying for all kinds of aid programs at the same time.  You don't need to understand all the different aid options - just fill out one form and submit it. You will automatically be considered for any aid programs for which you qualify.

The bad news is that depending on your income level, much of the aid you receive will be in the form of education loans.   Education loans are very cool, especially if they are subsidized (which means the payback doesn't start until after you finish college), but they do have to be paid back one day.  Those with low income will be able to get grant money.  Grant money is the best because it really is free money.

There is also another little-talked-about type of financial aid:  work study.  Work study is a program that allows you to work while you are going to college.  Your salary is paid by the government, through your financial aid, and then you just use your paycheck to pay for your books, etc.  With work study there is no debt building up to be paid back later.

More on all of these financial aid topics later...